Current through August 26, 2024
(1) COVERAGE FOR
SUDDEN ACCIDENTAL OCCURENCES. An owner or operator of a hazardous secondary
material reclamation facility or an intermediate facility subject to financial
assurance requirements under s.
NR 661.0004(1) (x) 6. f., or a group of
such facilities, shall demonstrate financial responsibility for bodily injury
and property damage to third parties caused by sudden accidental occurrences
arising from operations of the facility or group of facilities. The owner or
operator shall have and maintain liability coverage for sudden accidental
occurrences in the amount of at least $1 million per occurrence with an annual
aggregate of at least $2 million, exclusive of legal defense costs. This
liability coverage may be demonstrated as follows:
(a) An owner or operator may demonstrate the
required liability coverage by having liability insurance. The liability
insurance shall meet all of the following conditions:
1. Each insurance policy shall be amended by
attachment of the hazardous secondary material facility liability endorsement,
or evidenced by a certificate of liability insurance. The wording of the
endorsement shall be identical to the wording specified in s.
NR 661.0151(8). The wording of the
certificate of insurance shall be identical to the wording specified in s.
NR 661.0151(9). The owner or operator
shall submit a signed duplicate original of the endorsement or the certificate
of insurance to the department. If requested by the department, the owner or
operator shall provide a signed duplicate original of the insurance
policy.
2. Each insurance policy
shall be issued by an insurer which, at a minimum, is licensed to transact the
business of insurance, or eligible to provide insurance as an excess or surplus
lines insurer, in one or more states.
(b) An owner or operator may meet the
requirements of this section by passing a financial test or using the guarantee
for liability coverage as specified in subs. (6) and (7).
(c) An owner or operator may meet the
requirements of this section by obtaining a letter of credit for liability
coverage as specified in sub. (8).
(d) An owner or operator may meet the
requirements of this section by obtaining a surety bond for liability coverage
as specified in sub. (9).
(e) An
owner or operator may meet the requirements of this section by obtaining a
trust fund for liability coverage as specified in sub. (10).
(f) An owner or operator may demonstrate the
required liability coverage through the use of combinations of insurance,
financial test, guarantee, letter of credit, surety bond, and trust fund,
except that the owner or operator may not combine a financial test covering
part of the liability coverage requirement with a guarantee unless the
financial statement of the owner or operator is not consolidated with the
financial statement of the guarantor. The amounts of coverage demonstrated
shall total at least the minimum amounts required by this section. If the owner
or operator demonstrates the required coverage through the use of a combination
of financial assurances under this paragraph, the owner or operator shall
specify at least one assurance as "primary" coverage and shall specify other
assurance as "excess" coverage.
(g)
An owner or operator shall notify the department in writing within 30 days
whenever one of the following occurs:
1. A
claim results in a reduction in the amount of financial assurance for liability
coverage provided by a financial instrument authorized in pars. (a) to (f).
2. A certification of valid claim
for bodily injury or property damages caused by a sudden or non-sudden
accidental occurrence arising from the operation of a hazardous secondary
material reclamation facility or intermediate facility is entered between the
owner or operator and third-party claimant for liability coverage under pars.
(a) to (f).
3. A final court order
establishing a judgment for bodily injury or property damage caused by a sudden
or non-sudden accidental occurrence arising from the operation of a hazardous
secondary material reclamation facility or intermediate facility is issued
against the owner or operator or an instrument that is providing financial
assurance for liability coverage under pars. (a) to (f).
(2) COVERAGE FOR NON-SUDDEN
ACCIDENTAL OCCURENCES. An owner or operator of a hazardous secondary material
reclamation facility or intermediate facility with land-based units, as defined
in s.
NR 660.10(67m), which are used to manage
hazardous secondary material excluded under s.
NR 661.0004(1) (x) or a group of such
facilities, shall demonstrate financial responsibility for bodily injury and
property damage to third parties caused by non-sudden accidental occurrences
arising from operations of the facility or group of facilities. The owner or
operator shall have and maintain liability coverage for non-sudden accidental
occurrences in the amount of at least $3 million per occurrence with an annual
aggregate of at least $6 million, exclusive of legal defense costs. An owner or
operator who meets the requirements of this section may combine the required
per-occurrence coverage levels for sudden and non-sudden accidental occurrences
into a single per-occurrence level, and combine the required annual aggregate
coverage levels for sudden and non-sudden accidental occurrences into a single
annual aggregate level. An owner or operator who combines coverage levels for
sudden and non-sudden accidental occurrences shall maintain liability coverage
in the amount of at least $4 million per occurrence and an annual aggregate
amounting to $8 million. This liability coverage may be demonstrated in any of
the following ways:
(a) An owner or operator
may demonstrate the required liability coverage by having liability insurance.
The liability insurance shall meet all of the following conditions:
1. Each insurance policy shall be amended by
attachment of the hazardous secondary material facility liability endorsement
or evidenced by a certificate of liability insurance. The wording of the
endorsement shall be identical to the wording specified in s.
NR 661.0151(8). The wording of the
certificate of insurance shall be identical to the wording specified in s.
NR 661.0151(9). The owner or operator
shall submit a signed duplicate original of the endorsement or the certificate
of insurance to the department. If requested by the department, the owner or
operator shall provide a signed duplicate original of the insurance
policy.
2. Each insurance policy
shall be issued by an insurer that, at a minimum, is licensed to transact the
business of insurance, or eligible to provide insurance as an excess or surplus
lines insurer in one or more states.
(b) An owner or operator may meet the
requirements of this section by passing a financial test or using the guarantee
for liability coverage as specified in subs. (6) and (7).
(c) An owner or operator may meet the
requirements of this section by obtaining a letter of credit for liability
coverage as specified in sub. (8).
(d) An owner or operator may meet the
requirements of this section by obtaining a surety bond for liability coverage
as specified in sub. (9).
(e) An
owner or operator may meet the requirements of this section by obtaining a
trust fund for liability coverage as specified in sub. (10).
(f) An owner or operator may demonstrate the
required liability coverage through the use of combinations of insurance,
financial test, guarantee, letter of credit, surety bond, and trust fund,
except that the owner or operator may not combine a financial test covering
part of the liability coverage requirement with a guarantee unless the
financial statement of the owner or operator is not consolidated with the
financial statement of the guarantor. The amounts of coverage demonstrated
shall total at least the minimum amounts required by this section. If the owner
or operator demonstrates the required coverage through the use of a combination
of financial assurances under this paragraph, the owner or operator shall
specify at least one assurance as "primary" coverage and shall specify other
assurance as "excess" coverage.
(g)
An owner or operator shall notify the department in writing within 30 days
whenever one of the following occurs:
1. A
claim results in a reduction in the amount of financial assurance for liability
coverage provided by a financial instrument authorized in pars. (a) to (f).
2. A certification of valid claim
for bodily injury or property damages caused by a sudden or non-sudden
accidental occurrence arising from the operation of a hazardous secondary
material treatment or storage facility is entered between the owner or operator
and third-party claimant for liability coverage under pars. (a) to (f).
3. A final court order
establishing a judgment for bodily injury or property damage caused by a sudden
or non-sudden accidental occurrence arising from the operation of a hazardous
secondary material treatment or storage facility is issued against the owner or
operator or an instrument that is providing financial assurance for liability
coverage under pars. (a) to (f).
(3) REQUEST FOR VARIANCE. If an owner or
operator demonstrates to the satisfaction of the department that the levels of
financial responsibility required by sub. (1) or (2) are not consistent with
the degree and duration of risk associated with treatment or storage at the
facility or group of facilities, the owner or operator may obtain a variance
from the department. The request for a variance shall be submitted in writing
to the department. If granted, the variance will take the form of an adjusted
level of required liability coverage based on the department's assessment of
the degree and duration of risk associated with the ownership or operation of
the facility or group of facilities. The department may require an owner or
operator who requests a variance to provide technical and engineering
information as deemed necessary by the department to determine a level of
financial responsibility other than that required by sub. (1) or (2).
(4) ADJUSTMENTS BY THE DEPARTMENT.
if the department determines that the levels of financial responsibility
required under sub. (1) or (2) are not consistent with the degree and duration
of risk associated with treatment or storage at the facility or group of
facilities, the department may adjust the level of financial responsibility
required under sub. (1) or (2) as may be necessary to protect human health and
the environment. This adjusted level will be based on the department's
assessment of the degree and duration of risk associated with the ownership or
operation of the facility or group of facilities. In addition, if the
department determines that there is a significant risk to human health and the
environment from non-sudden accidental occurrences resulting from the
operations of a facility that is not a surface impoundment, pile, or land
treatment facility, the department may require that the owner or operator of
the facility comply with sub. (2). The owner or operator shall furnish to the
department, within a reasonable time, any information the department requests
to determine whether cause exists for such adjustments of level or type of
coverage.
(5) PERIOD OF COVERAGE.
Within 60 days after receiving certifications from the owner or operator and a
qualified professional engineer that all hazardous secondary material have been
removed from the facility or a unit at the facility and the facility or a unit
has been decontaminated in accordance with the approved plan under s.
NR 661.0143(8), the department shall
notify the owner or operator in writing that the owner or operator is no longer
required under s.
NR 661.0004(1) (x) 6. f. to maintain
liability coverage for that facility or a unit at the facility, unless the
department has reason to believe that that all hazardous secondary material
have not been removed from the facility or unit at a facility or that the
facility or unit has not been decontaminated in accordance with the approved
plan.
(6) FINANCIAL TEST FOR
LIABILITY COVERAGE.
(a) An owner or operator
may satisfy the requirements of this section by demonstrating that the owner or
operator passes a financial test as specified in this subsection. To pass this
test the owner or operator shall meet the criteria of either of the following:
1. The owner or operator shall have all of
the following:
a. Net working capital and
tangible net worth each at least 6 times the amount of liability coverage to be
demonstrated by this test.
b.
Tangible net worth of at least $10 million.
c. Assets in the United States amounting to
at least 90 percent of the owner's or operator's total assets, or at least 6
times the amount of liability coverage to be demonstrated by this
test.
2. The owner or
operator shall have all of the following:
a.
A current rating for the owner's or operator's most recent bond issuance of
AAA, AA, A, or BBB as issued by Standard and Poor's, or Aaa, Aa, A, or Baa as
issued by Moody's.
b. Tangible net
worth of at least $10 million.
c.
Tangible net worth at least 6 times the amount of liability coverage to be
demonstrated by this test.
d.
Assets in the United States amounting to either at least 90 percent of the
owner's or operator's total assets, or at least 6 times the amount of liability
coverage to be demonstrated by this test.
(b) The phrase "amount of liability coverage"
as used in par. (a) refers to the annual aggregate amounts for which coverage
is required under subs. (1) and (2) and the annual aggregate amounts for which
coverage is required under ss.
NR 664.0147(1) and
(2) and 665.0147(1) and (2).
(c) To demonstrate that the owner or operator
meets the test in par. (a), the owner or operator shall submit all of the
following to the department:
1. A letter
signed by the owner's or operator's chief financial officer and worded as
specified in s.
NR 661.0151(6). If an owner or operator
is using the financial test to demonstrate both assurance as specified by s.
NR 661.0143(5), and liability coverage,
the owner or operator shall submit the letter specified in s.
NR 661.0151(6) to cover both forms of
financial responsibility . A separate letter as specified in s.
NR 661.0151(5) is not
required.
2. A copy of the
independent certified public accountant's report on examination of the owner's
or operator's financial statements for the latest completed fiscal
year.
3. If the chief financial
officer's letter providing evidence of financial assurance includes financial
data showing that the owner or operator satisfies par. (a) 1. that are
different from the data in the audited financial statements referred to in
subd. 2. or any other audited financial statement or data filed with the U.S.
Securities and Exchange Commission, SEC, then a special report from the owner's
or operator's independent certified public accountant to the owner or operator
is required. The special report shall be based upon an agreed upon procedures
engagement in accordance with professional auditing standards and shall
describe the procedures performed in comparing the data in the chief financial
officer's letter derived from the independently audited, year-end financial
statements for the latest fiscal year with the amounts in such financial
statements, the findings of the comparison, and the reasons for any difference.
(d) The owner or operator
may obtain a one-time extension of the time allowed for submission of the
documents specified in par. (c) if the fiscal year of the owner or operator
ends during the 90 days prior to September 1, 2020, and if the year-end
financial statements for that fiscal year will be audited by an independent
certified public accountant. The extension shall end no later than 90 days
after the end of the owner's or operator's fiscal year. To obtain the
extension, the owner's or operator's chief financial officer shall send, by
September 1, 2020, a letter to the department. This letter from the chief
financial officer shall contain all of the following:
1. Request the extension.
2. Certify that the chief financial officer
has grounds to believe that the owner or operator meets the criteria of the
financial test.
3. Specify for each
facility to be covered by the test the EPA Identification Number, name,
address, the amount of liability coverage and, when applicable, current closure
and post-closure cost estimates to be covered by the test.
4. Specify the date ending the owner's or
operator's last complete fiscal year before September 1, 2020.
5. Specify the date, no later than 90 days
after the end of such fiscal year, when the chief financial officer will submit
the documents specified in par. (c).
6. Certify that the year-end financial
statements of the owner or operator for such fiscal year will be audited by an
independent certified public accountant.
(e) After the initial submission of items
specified in par. (c), the owner or operator shall send updated information to
the department within 90 days after the close of each succeeding fiscal year.
This information shall consist of the items specified in par. (c) 1. to
3.
(f) If the owner or operator no
longer meets the requirements under par. (a), the owner or operator shall
obtain insurance, a letter of credit, a surety bond, a trust fund, or a
guarantee for the entire amount of required liability coverage as specified in
this section. Evidence of liability coverage shall be submitted to the
department within 90 days after the end of the fiscal year for which the
year-end financial data show that the owner or operator no longer meets the
test requirements.
(g) The
department may disallow use of the test in par. (a) on the basis of
qualifications in the opinion expressed by the independent certified public
accountant in the independent certified public accountant's report on
examination of the owner's or operator's financial statements as specified in
par. (c) 2. An adverse opinion or a disclaimer of opinion will be cause for
disallowance. The department will evaluate other qualifications on an
individual basis. The owner or operator shall provide evidence of insurance for
the entire amount of required liability coverage as specified in this section
within 30 days after notification of disallowance.
(7) GUARANTEE FOR LIABILITY COVERAGE.
(a) Subject to par. (b), an owner or operator
may meet the requirements of this section by obtaining a written guarantee,
hereinafter referred to as "guarantee." The guarantor shall be the direct or
higher-tier parent corporation of the owner or operator, a firm whose parent
corporation is also the parent corporation of the owner or operator, or a firm
with a "substantial business relationship" with the owner or operator. The
guarantor shall meet the requirements for owners or operators under sub. (6)
(a) to (f). The wording of the guarantee shall be identical to the wording
specified in s.
NR 661.0151(7)
(b). A certified copy of the guarantee shall
accompany the items sent to the department as specified in sub. (6) (c). One of
these items shall be the letter from the guarantor's chief financial officer.
If the guarantor's parent corporation is also the parent corporation of the
owner or operator, this letter shall describe the value received in
consideration of the guarantee. If the guarantor is a firm with a "substantial
business relationship" with the owner or operator, this letter shall describe
this "substantial business relationship" and the value received in
consideration of the guarantee.
1. If the
owner or operator fails to satisfy a judgment based on a determination of
liability for bodily injury or property damage to third parties caused by
sudden or non-sudden accidental occurrences, or both as the case may be,
arising from the operation of facilities covered by this corporate guarantee,
or fails to pay an amount agreed to in settlement of claims arising from or
alleged to arise from such injury or damage, the guarantor will do so up to the
limits of coverage.
(b)
1. In the case of corporations incorporated
in the United States, a guarantee may be used to satisfy the requirements of
this section only if the attorneys general or insurance commissioners of the
following states have submitted a written statement to the department that a
guarantee executed as described in this section and s.
NR 661.0151(7)
(b) is a legally valid and enforceable
obligation in that state:
a. The state in
which the guarantor is incorporated.
b. Each state in which a facility covered by
the guarantee is located.
2. In the case of corporations incorporated
outside the United States, a guarantee may be used to satisfy the requirements
of this section only if all of the following conditions are met:
a. The non-U.S. corporation has identified a
registered agent for service of process in each state in which a facility
covered by the guarantee is located and in the state in which it has its
principal place of business.
b. The
attorney general or insurance commissioner of each state in which a facility
covered by the guarantee is located and the state in which the guarantor
corporation has its principal place of business, has submitted a written
statement to the department that a guarantee executed as described in this
section and s.
NR 661.0151(7)
(b) is a legally valid and enforceable
obligation in that state.
(8) LETTER OF CREDIT FOR LIABILITY COVERAGE.
(a) An owner or operator may satisfy the
requirements of this section by obtaining an irrevocable standby letter of
credit that conforms to the requirements of this subsection and submitting a
copy of the letter of credit to the department.
(b) The financial institution issuing the
letter of credit shall be an entity that has the authority to issue letters of
credit and whose letter of credit operations are regulated and examined by a
federal or state agency.
(c) The
wording of the letter of credit shall be identical to the wording specified in
s.
NR 661.0151(10).
(d) An owner or operator who uses a letter of
credit to satisfy the requirements of this section may also establish a standby
trust fund. Under the terms of the letter of credit, all amounts paid pursuant
to a draft by the trustee of the standby trust will be deposited by the issuing
institution into the standby trust in accordance with instructions from the
trustee. The trustee of the standby trust fund shall be an entity that has the
authority to act as a trustee and whose trust operations are regulated and
examined by a federal or state agency.
(e) The wording of the standby trust fund
shall be identical to the wording specified in s.
NR 661.0151(13).
(9) SURETY BOND FOR LIABILTY
COVERAGE.
(a) An owner or
operator may satisfy the requirements of this section by obtaining a surety
bond that conforms to the requirements of this subsection and submitting a copy
of the bond to the department.
(b)
The surety company issuing the bond shall be among those listed as acceptable
sureties on federal bonds in the most recent Circular 570 of the U.S.
department of the treasury.
(c) The
wording of the surety bond shall be identical to the wording specified in s.
NR 661.0151(11).
(d) A surety bond may be used to satisfy the
requirements of this section only if the attorneys general or insurance
commissioners of the following states have submitted a written statement to the
department that a surety bond executed as described in this section and s.
NR 661.0151(7)
(b) is a legally valid and enforceable
obligation in that state:
1. The state in
which the surety is incorporated.
2. Each state in which a facility covered by
the surety bond is located.
(10) TRUST FUND FOR LIABILITY COVERAGE.
(a) An owner or operator may satisfy the
requirements of this section by establishing a trust fund that conforms to the
requirements of this subsection and submitting an originally signed duplicate
of the trust agreement to the department.
(b) The trustee shall be an entity that has
the authority to act as a trustee and whose trust operations are regulated and
examined by a federal or state agency.
(c) The trust fund for liability coverage
shall be funded for the full amount of the liability coverage to be provided by
the trust fund before it may be relied upon to satisfy the requirements of this
section. If at any time after the trust fund is created the amount of funds in
the trust fund is reduced below the full amount of the liability coverage to be
provided, the owner or operator, by the anniversary date of the establishment
of the fund, shall either add sufficient funds to the trust fund to cause its
value to equal the full amount of liability coverage to be provided, or obtain
other financial assurance as specified in this section to cover the difference.
For the purposes of this paragraph, "the full amount of the liability coverage
to be provided" means the amount of coverage for sudden or non-sudden
occurrences, or both, required to be provided by the owner or operator by this
section, less the amount of financial assurance for liability coverage that is
being provided by other financial assurance mechanisms being used to
demonstrate financial assurance by the owner or operator.
(d) The wording of the trust fund shall be
identical to the wording specified in s.
NR 661.0151(12).
